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Tesla Motors Inc (NASDAQ:TSLA): Elon Musk’s “Secret Master Plan” Brings Auto Industry To Knees

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Tesla is revolutionizing the automobile market via three different generations of electric cars under the Master Plan

Tesla Motors Inc (NASDAQ:TSLA) has been operating for roughly a decade and in such short period, it has shaken the dynamics of the automobile market. Once lampooned for building expensive, impractical electric vehicles (EVs), the company is now admired by executives of leading car brands, which are following its footsteps to make the world a better place to live.

Technically, the Tesla man, Elon Musk has single-handedly brought the entire auto industry to its knees. While many countries around the world, including India and the Netherlands, plan to promote green-energy vehicles, some of them also plan to completely ban gasoline-driven vehicles.

Apart from Mr. Musk and his team’s battle against the fossil fuel companies in public forums and legislatures, Tesla developed a “Secret Master Plan” which is wobbling the traditional, internal combustion engine (ICE) companies around the globe. The plan that aims to accelerate the transition of sustainable energy and transport consists of three steps.

Step 1: Low-Volume, High-Price Transport

To make a difference with tiny company having limited resources, Tesla introduced a low-volume, high-price vehicle, Tesla Roadster, in 2006 from the group up.  Mr. Musk stated at Model 3 event: “With any new technology, it takes multiple iterations and takes economies of scale before you can make it great and affordable.” )

Despite being extremely expensive and catering to limited customers, the Roadster showed the world that Tesla can make a compelling EV, as it was the first “really amazing electric car.” Before Roadster, EVs were considered as slow and ugly machines, with low-range and poor-performance. Tesla broke this “mould,” because the vehicle was a fast, beautiful, high-performing roadster.

Despite just 500 production units per year, the Roaster had “very leveraged effect,” as former GM Vice Chairman Bob Lutz accredits it with Chevy Volt program, which led to Nissan LEAF program. However, at the end of the day it was just a toy for rich men.

Step 2: Mid-Volume, Less-High Price Transport

To offer a daily-use car, Tesla rolled out a mid-volume, less-expensive sedan, the Model S, in 2012. The premium sedan received innumerable awards and superior ratings from almost all of the testing agencies on the back of its great handling, safety, Ludicrous mode, and Autopilot features.

Mr. Musk clarified that the vehicle was not build to attain these milestones, but to show the world an EV’s capability. Since half of the market required sedan and half the market required SUV, Tesla extended the Stage 2 from Model S to Model X, which was launched recently and has already broken several records.

Step 3: Mass-Market Transport

Model S/X sale proceeds will be used for development of Tesla’s first high-volume, affordable-price (mass-market), vehicle, the Model 3. The compact sedan, a 5-seater which can do 0-60 mph in less than 6 seconds and gives 215 mile range, will have all the key features, including 5-star safety rating, Autopilot features and Supercharging, like its predecessors.

Tesla’s final piece of the puzzle will be delivered by 2017-end and claimed to be better than its existing/upcoming rivals, even without options.

 

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